The insurance claim lawyers at Tauler Smith LLP recently won a major trial on behalf of a food & beverage manufacturer in a federal court in St. Louis, Missouri. The litigation began in a California courtroom with a business dispute over the manufacture of protein bars. Later, several of the parties in that case were also involved in insurance litigation heard by a U.S. District Court. Now, the judge has issued a ruling, with Tauler Smith winning a federal bench trial for their insurance consumer client.
The federal court’s decision can be read here. To learn more about Tauler Smith’s victory in the insurance claim lawsuit, keep reading this blog.
California Nutritional Supplement Lawyers Represent Food Manufacturer in Defective Protein Bar Lawsuit
One of the defendants in the nutritional supplement lawsuit was Eagle Mist Corporation, which does business as Osagai International and which is run by Kevin Laughlin. Eagle Mist is a company that invents and formulates functional foods, such as protein shakes and nutrition bars. They also provide other manufacturers with the technological ingredients they need for foods, beverages, and personal care products.
Nutritional Supplement Agreement
Eagle Mist entered into an agreement to supply ingredients to Sapphire Bakery, which would use the ingredients to reformulate and manufacture 13 types of nutritional protein bars. Sapphire then supplied the nutrition bars to Defense Nutrition, which finally supplied the bars to Julian Bakery.
Nutritional Supplement Dispute
Julian Bakery, the company that ultimately received delivery of the protein bars, alleged that the bars were defective due to the other companies modifying the formula of the bars, in addition to using certain processing agents during manufacturing. Julian Bakery sued Eagle Mist and Sapphire for breach of contract, damages related to defective goods, negligence, breach of warranty, unfair business practices, fraud, negligent misrepresentation, and promissory estoppel.
The lawsuit was filed in the Los Angeles County Superior Court, and the complex multi-party litigation included cross-complaints between seven (7) parties that all had a connection to the business dispute. Los Angeles nutritional supplement attorney Robert Tauler represented Eagle Mist in the California litigation, and successfully defeated three successive motions for summary adjudication in the case.
Insurance Coverage Dispute in California Food Supplement Case
Before starting production on the nutrition bars that were to eventually be delivered to Julian Bakery, Eagle Mist needed to get insurance coverage. At the time, Sapphire Bakery had a commercial general liability policy of insurance issued by Ohio Security Insurance Company. That policy called for Ohio Security to cover any legal expenses that Sapphire might one day become obligated to pay as damages in a lawsuit if sued. Since Sapphire’s insurance policy with Ohio Security allowed for the “named insured” to extend coverage to another company as an “additional insured,” Sapphire asked Ohio Security’s insurance broker to include Eagle Mist in its policy. The insurance broker then provided a certificate of liability insurance to Eagle Mist.
The insurance coverage became extremely important later when there was a business dispute over the manufacture of the nutrition bars. Sapphire Bakery’s insurance policy with Ohio Security meant that the insurance company would pay for Sapphire’s legal defense in the nutritional supplement litigation. The insurance company also agreed to pay for Eagle Mist’s legal defense in the civil suit because Eagle Mist was on the policy as an additional insured.
Texas Consumer Protection Attorney Camrie Ventry Wins Insurance Claim Litigation in U.S. District Court
The plaintiffs in the insurance claim litigation were Ohio Security Insurance Company and Ohio Casualty Insurance Company. The parent company of Ohio Security and Casualty is Liberty Mutual Insurance. Ohio Security and Liberty Mutual paid for Eagle Mist’s legal defense in the California nutritional supplement case. Later, the insurance companies argued at trial that Eagle Mist should be ordered to pay back their legal defense costs because they were never supposed to be covered under the insurance policy.
Dallas consumer protection attorney Camrie Ventry of Tauler Smith LLP represented Eagle Mist in the insurance coverage lawsuit. The case was heard by the United States District Court for the Eastern District of Missouri, with the court holding a one-day bench trial and issuing a memorandum opinion on December 16, 2022. The court was tasked with determining whether Ohio Security Insurance Company did, in fact, have a legal obligation to defend Eagle Mist under the terms of its insurance policy, as well as whether Ohio Security was entitled to reimbursement of the legal defense costs that they provided to Eagle Mist.
Federal Court Rules That Insurance Company Unreasonably Delayed Its Coverage Decision
Ohio Security’s argument at trial was that because Eagle Mist was never covered under the insurance policy, the insurance provider was entitled to recover all expenses it paid for Eagle Mist’s legal defense. The U.S. District Court rejected this argument and found that, under the circumstances, it was justified for Eagle Mist to retain the benefits of the legal expenses paid by the insurance company. Accordingly, the court entered judgment in favor of the Tauler Smith LLP client.
The court cited four main reasons for its ruling in favor of Eagle Mist and against the insurance company:
- Ohio Security voluntarily assumed the defense of Eagle Mist in the nutritional supplement lawsuit.
- Ohio Security had ongoing knowledge that Eagle Mist was not actually covered under the insurance policy.
- Ohio Security continuously paid the defense costs of Eagle Mist in the nutritional supplement lawsuit.
- Ohio Security unreasonably delayed for three (3) years before finally notifying Eagle Mist that they were not covered under the policy.
#1 – Insurance Company Agreed to Extend Policy Benefits
One of the benefits of Ohio Security’s insurance policy with Sapphire Bakery (and with Eagle Mist) was that Ohio Security agreed to pay all legal defense costs if there was a lawsuit brought by a third party.
As soon as the defective protein bars lawsuit was filed, Kevin Laughlin and Eagle Mist contacted Ohio Security Insurance Company to confirm that Eagle Mist was covered under the insurance policy. The U.S. District Court said that Eagle Mist had a good faith basis to believe that they were covered under the insurance policy. Kevin Laughlin communicated both verbally and in writing with Ohio Security to confirm that Eagle Mist was an additional insured under the policy, and he did the same with Sapphire Bakery. Moreover, the court found, Laughlin reasonably believed that the Certificate of Insurance issued by the insurance broker explicitly conferred coverage.
#2 – Insurance Company Knew the Policy Was Invalid
Shortly after the supplement civil suit was filed, the insurance company conducted its own investigation to verify whether Eagle Mist qualified as an additional insured under the insurance policy. During this investigation, Eagle Mist provided Ohio Security with email communications, purchase orders, and contracts.
According to the U.S. District Court, Ohio Security knew for several years that Eagle Mist was not actually covered under the insurance policy. But rather than acting quickly to provide notice, the insurance company delayed for three (3) years before finally informing Eagle Mist at a time when it would be most inconvenient for the food & beverage ingredient supplier.
#3 – Insurance Company Continued to Pay Legal Bills
After the investigation, Ohio Security still agreed to cover Eagle Mist’s legal fees for the nutritional supplement lawsuit. For the next three (3) years, the insurance company paid all of Eagle Mist’s legal bills in the case. During this time, Ohio Security made no statements to indicate that Eagle Mist was not covered under the insurance policy, nor did they provide notice to Eagle Mist that the food and beverage company was not covered under the insurance policy. It was only when the lawsuit was set to start trial that Ohio Security suddenly revealed that Eagle Mist never should have been covered under the policy. Ohio Security withdrew their defense, stopped paying Eagle Mist’s legal bills, and demanded that Eagle Mist repay nearly $1 million in defense costs already paid.
#4 – Insurance Company Delayed Its Coverage Decision
Although Ohio Security assumed the defense of Eagle Mist in the case and agreed to cover all legal costs, the insurance company argued that they had explicitly reserved the right to opt out of the arrangement. The court found this argument unpersuasive because the insurance company “essentially buried their head in the sand,” only to later “ask the Court to claw back funds they voluntarily paid over a span of years without producing any evidence that Defendants acted unjustly or that a three-year delay in asserting their coverage position was justified or reasonable.”
The insurance company knew at the start of the California nutritional supplement litigation that Eagle Mist was not supposed to be covered under the policy, but nevertheless continued to pay all legal costs while telling Eagle Mist that there were no issues. Then, after delaying for several years, the insurance company suddenly informed Eagle Mist that they were not covered under the policy. This sudden change in coverage came just one month before trial in the supplement lawsuit, when Eagle Mist would be most vulnerable.
The insurance company tried to justify its decision to withdraw coverage by pointing to a single, vague sentence about “reservation of rights” buried in a 25-page boilerplate letter. The court rejected this argument by noting that “a single mention in a twenty-five-plus-page boilerplate reservation of rights letter, without any further action by Plaintiffs for three years, was insufficient to put Defendants on notice they might not be covered under the Policy.”
Tauler Smith Insurance Litigation Team Represents Businesses & Consumers in California, Texas, and Throughout the U.S.
The Tauler Smith consumer protection & insurance litigation team is proud of its strong track record in insurance claim cases in state courts across California and Texas, as well as in federal courtrooms. Insurance companies must be held accountable when they attempt to take advantage of customers, which is why Camrie Ventry and our Texas litigators always fight so hard for clients in these cases.
After successfully defending Eagle Mist against Ohio Security and Liberty Mutual, Ms. Ventry called it “a great victory” for businesses and individuals who are unfairly forced to pursue the insurance benefits to which they are entitled. Ms. Ventry added, “This ruling shows that insurance companies cannot overreach by demanding to recover an exorbitant amount of money from the very people they are charged with protecting. The court got it right.”
Contact the California and Texas Insurance Claim Lawyers at Tauler Smith LLP
The attorneys at Tauler Smith LLP represent businesses and individuals in a range of practice areas, including dietary supplement lawsuits, consumer protection litigation, and insurance litigation. Call us today or send an email to schedule a free initial consultation about your case.
Tom Girardi Indicted for Embezzlement
/in Arbitration /by taulersmithDisgraced California lawyer Tom Girardi was indicted for embezzlement by a federal grand jury. The charges stem from allegations that Girardi engaged in highly unethical and illegal behavior, which included using private judges affiliated with the national arbitration company JAMS to steal millions of dollars from his clients. The U.S. Department of Justice (DOJ) announced the felony charges against Girardi after the grand jury formally indicted him. U.S. Attorney Martin Estrada observed that Girardi “preyed on the very people who trusted and relied upon him the most—his clients—and brought disrepute upon the entire legal profession.”
For more information about Tom Girardi’s indictment and his connection with JAMS, keep reading this blog.
Who Are Tom Girardi and Erika Jayne?
Tom Girardi used to be a well-respected attorney. For many years, the prominent Los Angeles lawyer was known for being a dogged defender of the powerless as they filed class action lawsuits against corporations. As the founder of California law firm Girardi & Keese, he represented plaintiffs in a number of high-profile cases, including Brian Stow’s civil suit against Major League Baseball. Stow was the San Francisco Giants fan who sustained severe injuries during an attack at a Los Angeles Dodgers game. Girardi also represented the plaintiffs in the case against Pacific Gas & Electric Co. dramatized in the Julia Roberts movie Erin Brockovich.
Outside of the courtroom, Girardi became known for being the husband of “Real Housewives of Beverly Hills” star Erika Jayne, who eventually filed for divorce from Girardi. They were married for 21 years. After the split, the couple listed their Pasadena home for sale at a price of $13 million. Jayne has also been accused of illegally using funds meant for Girardi’s clients to cover her own personal expenses, including the purchase of expensive diamond earrings.
Federal Grand Jury in California Indicts Tom Girardi on Wire Fraud Charges
As a plaintiff’s attorney in California, Tom Girardi was responsible for negotiating settlements in mass tort lawsuits. Instead of sending the settlement funds to his clients, however, Girardi allegedly deposited the money into law firm accounts that he later accessed for his own personal use. A federal grand jury in California has now indicted Girardi on charges that he embezzled $15 million from clients over a period of 10 years, resulting in the DOJ bringing formal charges against him for five counts of wire fraud. If Girardi is convicted of wire fraud, he could be sentenced to 20 years in federal prison.
Martin Estrada, the United States Attorney for the Central District of California, issued a statement about the case after the grand jury indictment was announced. Estrada said that Girardi is “accused of engaging in a widespread scheme to steal from clients and lie to them to cover up the fraud.”
FBI Acting Assistant Director in Charge Amir Ehsaei also weighed in on the charges against Girardi. Ehsaei said that the disgraced attorney “created a mirage over several years in order to disguise the fact that he was robbing clients of large sums of money…to fund his lavish lifestyle.” Ehsaei observed that Girardi’s alleged theft came at the expense of clients who were enduring significant hardships of their own as they desperately awaited settlement funds to cover medical bills and other expenses. The clients’ unfamiliarity with the legal process made it possible for Girardi to take advantage of them.
What’s Next in the Criminal Case Against Tom Girardi?
Last year, Tom Girardi was reportedly diagnosed with Alzheimer’s and dementia. At his initial appearance in federal criminal court, United States Magistrate Judge Karen L. Stevenson ordered a mental competency hearing to determine whether Girardi is fit to stand trial on the criminal charges. In the meantime, Girardi’s bond was set at $250,000 and he was released to the custody of his brother Robert Girardi. The next hearing will occur in the U.S. District Court for the Central District of California.
The Girardi Keese law firm is no longer operational, having declared bankruptcy with more than $100 million in total debt. Additionally, Girardi was disbarred as a result of the alleged embezzlement and cannot act as an attorney in California. He has been living at the Belmont Village Senior Living Facility in Burbank, CA.
Erika Jayne and Others Accused of Business Fraud with Tom Girardi
Also criminally charged along with Tom Girardi is Christopher Kamon, who served as the chief financial officer of Girardi’s law firm for more than a decade. According to law enforcement officials, Kamon was the person who handled financial accounting for the firm. Federal prosecutors believe that Kamon committed wire fraud offenses by embezzling client funds for personal expenses.
Additionally, Girardi’s son-in-law David Lira has been accused of fraud in connection with the Girardi & Keese firm. A federal grand jury in Chicago issued an indictment against both Girardi and Lira on charges filed by the U.S. Attorney’s Office. They have been accused of stealing more than $3 million in settlement funds from clients whose families were killed in the 2018 Boeing Lion Air Flight 610 crash in Indonesia.
Erika Jayne Sued for Fraud
A civil suit has also been filed that accuses Tom Girardi’s estranged wife, reality TV star Erika Jayne, of participating in the illegal fraud scheme. The trustee overseeing the bankruptcy of Girardi’s law firm filed the lawsuit against the Real Housewives star after reportedly discovering that Jayne received $25 million in transfers from the law firm to her company, EJ Global LLC. She then allegedly used the money to pay personal expenses, such as her credit card bill, personal assistant salaries, and a fashion and makeup team. Jayne has denied having any knowledge of Girardi’s alleged embezzlement of client funds.
JAMS Mediators Allegedly Helped Tom Girardi Embezzle Money from Clients
According to the Department of Justice, Tom Girardi was able to get away with embezzling client funds by placing onerous requirements on clients to access their settlement money. For example, Girardi often told clients that they needed to get authorizations from JAMS judges in order to receive the funds. The JAMS private judges were overseeing the lawsuit settlements and had control over how and when the funds were distributed. Many of these judges had personal relationships with Girardi, creating an obvious conflict of interest for the alternative dispute resolution company.
Over the years, there have been many other instances of JAMS judges being biased in favor of certain litigants and showing favoritism in their rulings. In fact, several JAMS mediators and arbitrators benefited financially from their involvement in Girardi’s fraud by charging as much as $1,500 per hour for their work on his cases. Beyond that, JAMS reportedly made millions of dollars by providing mediators to oversee Girardi’s settlements.
Contact the Los Angeles Arbitration Attorneys at Tauler Smith LLP
Tauler Smith LLP is a California law firm that helps individuals, small business owners, and others bring class action lawsuits against JAMS. If you were involved in an arbitration or mediation that was administered by JAMS, you may have a legal claim against the company for the way they handled your case. Call 310-590-3927 or email us today to discuss your options with one of our experienced Los Angeles arbitration attorneys.
Goodyear Tires Wiretapping Lawsuit to Proceed
/in False Advertising /by taulersmithIn a highly anticipated ruling, a federal judge in California recently denied Goodyear’s motion to dismiss wiretapping claims based on their use of third-party chat applications hosted on their website. This ruling allows the Goodyear Tires wiretapping lawsuit to proceed. The complaint alleges that when users visit www.goodyear.com/ and use the website chat feature, they share personal data in communications that are unlawfully recorded and transcribed. The plaintiff alleged that Goodyear was allowing a third-party company to intercept, eavesdrop, and store transcripts of the conversations, which is prohibited by the California Invasion of Privacy Act (CIPA).
Do you live in California? Did you use a chat feature on a commercial website? You may be eligible to file a civil suit for invasion of privacy and get financial compensation. Contact us now.
CIPA Claim: Judge Denies Motion to Dismiss Goodyear Wiretapping Lawsuit
The California Central District Court recently issued a ruling in a case involving allegations that Goodyear Tires violated the California Invasion of Privacy Act (CIPA) by wiretapping user chats on the company’s website. The federal court agreed with the plaintiff that the chat feature violated the CIPA, ruling that the plaintiff contends that Goodyear used a third-party service to “intercept in real time” website visitors’ chat conversations. The court added that the allegation that user messages were unlawfully intercepted “is to be taken as true at this stage of the case.”
In her CIPA claim, the plaintiff alleged that visitors to the Goodyear Tires website share “sensitive personal information” when they use the chat conversation. Significantly, the court ruled that the plaintiff pled sufficient facts for a claim under § 631(a) of the CIPA by showing that chat communications were intercepted, and those communications plausibly contained “more than mere record information” such as her name and address.
Wiretapping of Smartphone Communications
The California Central District Court also addressed the fact that the plaintiff accessed the Goodyear Tires website on her smartphone, which is considered a cellular phone with web capabilities. The federal court noted the precedent set by other courts that have applied § 632.7 of the CIPA to internet-based communications, ruling that the plaintiff has sufficiently alleged that users of Goodyear’s chat feature have a reasonable expectation of privacy because they share highly sensitive personal data.
California Has the Strongest Data Privacy Laws in the Country
California’s consumer protection laws include the California Invasion of Privacy Act (CIPA) and the California Consumer Privacy Act (CCPA). The CIPA requires companies to get permission before recording any online chats, while the CCPA gives customers the right to prevent companies from sharing their personal data. California’s data privacy laws go even further by placing the onus on companies to make efforts to warn customers if their phone conversations or online chats are being monitored or recorded. In fact, California has some of the strongest such laws in the country. This may be why Goodyear’s terms of use include a forum selection clause requiring claims to be filed in another state: Ohio.
Goodyear Website Terms of Use
The Goodyear Tires website has a “Terms of Use and Privacy Policy” hyperlink at the bottom of the homepage. Site visitors can only see this link by scrolling all the way down on the website. When a user clicks on this link, they are directed to a “Terms, Conditions & Privacy Policy” page that includes another link for Terms of Use. There is no option for the user to click a button acknowledging that they have read the terms of use. Buried deep on this page is a section on “Applicable Laws,” which includes a forum selection clause stating that anyone who uses the Goodyear website automatically consents to litigating any legal disputes in an Ohio courtroom.
Goodyear Forum Selection Clause
In a recent lawsuit filed in California by Los Angeles false advertising attorney Robert Tauler against Goodyear, the tire company attempted to get the case moved to a jurisdiction with less stringent consumer protection laws. Goodyear specifically requested that the venue be changed from the U.S. District Court for the Central District of California to the District Court for the Northern District of Ohio.
Goodyear Tires argued that the plaintiff already agreed to having any legal proceedings handled in Ohio because she used the Goodyear website and automatically consented to the forum selection clause contained in the website’s “Terms of Use.” Robert Tauler responded on behalf of the plaintiff and persuasively argued that it was not possible for the plaintiff to legally consent to the forum selection clause because there was neither actual nor constructive notice of the “Terms of Use.”
The California federal trial court hearing the case ultimately rejected Goodyear’s motion to change venue, which means that the case will be adjudicated in the California Central District Court and decided under California’s very strong invasion of privacy and consumer protection laws. The court gave several reasons for ruling in favor of the consumer-plaintiff and against Goodyear, including contract formation laws which require mutual assent in order for a contract to be binding on both parties.
Are Internet Contracts Legally Enforceable?
The Ninth Circuit Court of Appeals previously identified two categories of internet contracts like the Goodyear terms of use:
An important aspect of browsewrap agreements is that it is possible for a site visitor to continue using a website without knowing that the agreement even exists. That’s because browsewrap agreements like the one on the Goodyear Tires website do not require site visitors to take any affirmative action. This creates a legal issue for internet contracts that rely on browsewrap agreements since users might not have an opportunity to assent to the terms of use. Courts have held that such a contract can only be valid if the website user had either actual or constructive notice of the terms and conditions.
Goodyear Browsewrap Agreement
The Goodyear browsewrap agreement does not qualify as a valid, legally binding internet contract because the website terms of use are inconspicuous: the hyperlink can only be seen when the user scrolls to the bottom of the page, and the text does not stand out against the background colors. This does not provide the user with sufficient notice. In Wilson v. Huuuge, Inc., the Ninth Circuit Court of Appeals held that courts should not enforce a similar smartphone app agreement “where the terms are buried at the bottom of the page or tucked away in obscure corners of the website.”
Additionally, there is nothing on the Goodyear Tires website that requires the consumer to click a button, check a box, or take any other action that would unambiguously convey their assent to the terms of use. This also means that site visitors are not provided with constructive notice of the website terms of use which they are supposedly agreeing to abide by.
Class Action Lawsuit Against Goodyear Tires for Violating California’s Wiretapping Law
When you visit a website, you have an expectation that your personal data will be protected and that any conversations you have on the website will remain confidential. The Los Angeles consumer protection attorneys at Tauler Smith LLP help clients file CIPA claims both individually and in class action lawsuits against companies that violate California’s data privacy laws. For example, our attorneys have represented individuals whose data was compromised due to illegal wiretapping and eavesdropping, including chat conversations on company websites.
The CIPA is a criminal statute that subjects companies to criminal penalties, including jail time and substantial fines. Victims can also bring civil lawsuits to recover statutory damages of $5,000 for each illegally recorded conversation. In some cases, it may be possible to recover treble damages, meaning that plaintiffs are eligible for up to three (3) times the total economic damages caused by the invasion of privacy.
Contact the California Consumer Protection Attorneys at Tauler Smith LLP Today
Did you use the chat feature on the Goodyear Tires website? Did you use a chat feature on any other commercial website? If so, your personal data may have been unlawfully recorded without your consent and in violation of both state and federal wiretapping laws. The California consumer protection lawyers at Tauler Smith LLP can help you. Call 310-590-3927 or send an email to learn more and find out if you are eligible to file a CIPA claim.
Shipping Insurance Claims and the UCL
/in False Advertising /by taulersmithMany companies that offer shipping insurance on e-commerce sites are violating California insurance laws, which have strict requirements about who is allowed to offer insurance and how that insurance can be offered. Moreover, California’s insurance laws can serve as a predicate for civil lawsuits brought under other statutes, including the California Unfair Competition Law (UCL). When it comes to shipping insurance claims and the UCL, there is strong legal precedent in favor of consumers who are charged for insurance by an unlicensed agent. Additionally, the shipping insurance offered by online sellers is often just a surcharge on services already being provided, which is business fraud that can also be the basis for a civil suit.
To learn more about how California consumer protection laws can be used to file a shipping insurance lawsuit against e-commerce sellers, keep reading.
Filing a Shipping Insurance Lawsuit Under California’s Unfair Competition Law (UCL)
Some companies that offer shipping insurance on their e-commerce websites expressly label it as “insurance,” while other companies call it “safe ship” or use another term. In fact, it is common for online sellers to refer to an insurance fee by some other name. For example, the plaintiff in Miller v. Travel Guard Group alleged that the company mislabeled the travel insurance fee on their website in order to get around the state prohibition against unlicensed agents selling insurance. Regardless of what term is used, however, both the California Insurance Code and the Unfair Competition Law (UCL) protect consumers against unlawful offers of insurance.
Section 1631 of the California Insurance Code imposes licensing requirements on any entity that seeks to sell insurance in the state. If a company violates the California Insurance Code by attempting to sell insurance as an unlicensed agent, consumers may be able to bring a UCL claim. Additionally, companies that hide a shipping insurance charge on a purchase could be exposed to lawsuits under the UCL for false, misleading, deceptive, and unlawful marketing and sales practices.
Section 17200 of the UCL
The California Unfair Competition Law (UCL) is set forth in Cal. Bus. & Prof. Code § 17200. The statute defines “unfair competition” as:
The UCL is a sweeping law that is meant to protect both consumers and businesses. In fact, the statute has been interpreted broadly by California courts to cover a wide variety of business acts and consumer transactions, including antitrust violations, intellectual property claims, employment claims, and disputes over shipping insurance charges.
Both federal and California courts have held that companies may be sued for breach of contract and unfair competition when they violate state insurance laws. In fact, the U.S. Court of Appeals for the Ninth Circuit said that the California Insurance Code can serve as a predicate for a claim brought under the California Unfair Competition Law (UCL) even though the UCL does not explicitly provide for a private right of action for shipping insurance claims. In Miller v. Travel Guard Group, the California Northern District Court went even further by ruling that consumers may bring a claim under the UCL based on both an illegal agent theory and an illegal premium theory when the insurance fee is automatically included in the total price and the customer is not given an opportunity to opt out of paying it.
Only Licensed Agents Can Sell Insurance in California
California has strict laws regulating exactly who can sell insurance. Whether it’s auto insurance, property insurance, health insurance, general liability insurance, or shipping insurance, only licensed agents are allowed to offer insurance to customers. One way that California law protects consumers against insurance fraud is by requiring many types of insurance agents (e.g., home and auto insurance) to file bonds with the state insurance commission.
In order to charge customers for shipping insurance, a company must comply with California’s insurance laws. This means that insurance agents need to be registered with the state. Beyond that, owners, insurance agents, and even non-licensed employees must provide fingerprints that are kept on file with the state. All of this is in addition to standard business certification requirements, such as securing a certificate of good standing if the company is a corporation and a certificate of organization if the company is an LLC.
Friedman v. AARP Established Precedent for Shipping Insurance Claims in California
In Friedman v. AARP, Inc., the Ninth Circuit Court issued an important ruling that set precedent for subsequent cases involving offers of insurance to California consumers. The plaintiff in Friedman was a Medicare recipient who purchased UnitedHealth supplemental health insurance coverage through the AARP (previously known as the American Association of Retired Persons). Since AARP earned a 5% commission on the sale, they were essentially acting as an insurance seller without a license. This would be in direct violation of California Insurance Code § 1631. That statute prohibits anyone from soliciting, negotiating, or effecting an insurance contract unless the person holds a valid license from the California Commissioner of Insurance. California Insurance Code § 1633 goes even further by explicitly prohibiting an unlicensed company from “transacting” insurance regardless of whether the company reports itself as an insurance agent.
Facts of the Case
The plaintiff in the case was Jerald Friedman. He was one of several AARP members who filed a class action against AARP because the organization allegedly charged inflated insurance rates for Medigap coverage. (Medigap policies provide supplemental health insurance for costs that are not already covered by Medicare.) These exaggerated charges allegedly stemmed from a hidden commission that AARP was collecting.
The lower court in Friedman dismissed a class action brought by the plaintiff under the UCL. The Ninth Circuit then reversed that decision because the federal appellate court determined that AARP’s fee arrangement qualified as a commission on every insurance sale. In other words, AARP was acting as an insurance agent by selling insurance.
UCL Violation
Section 17200 of the California Unfair Competition Law (UCL) explicitly prohibits companies from engaging in “any unlawful, unfair, or fraudulent business act or practice.” AARP was accused of violating the UCL by committing the unlawful act of selling insurance without a license.
Since AARP is not licensed to sell insurance in California, it is unlawful for the group to offer insurance to its California members. AARP marketed the Medigap policy to its members in a number of ways, including television ads, websites, and materials sent directly through the mail. A lot of these advertisements included text reading, “This is a solicitation of insurance.” Although AARP later tried to describe its insurance commission as a “royalty,” the federal government determined that it was still a commission being charged on top of the typical monthly premium. This meant that AARP was essentially acting as an insurance agent despite not having a license to do so in California.
Unlawful to Conceal a Shipping Insurance Charge in California
Under California law, there is an expectation that consumers will be able to provide informed consent for purchases they make online. Unfortunately, some businesses trick customers into paying more for shipping insurance with hidden or confusing features on their e-commerce websites, particularly when it comes to placing and finalizing orders. The businesses generate additional revenues by offering a service that they are not legally allowed to offer without a valid, state-issued license.
Companies that do business in California and use deceptive marketing and sales tactics could be subject to civil suits for violating the UCL. That’s because the statute prohibits false, misleading, deceptive, and fraudulent acts or practices, which may include attempts by the business to deceive customers about hidden shipping insurance fees. An experienced Los Angeles insurance claim lawyer can help consumers bring a lawsuit against companies that violate the UCL by making an unlawful offer of shipping insurance.
UCL Claims
When consumers unknowingly purchase shipping insurance on a website due to misleading and/or deceptive information, they suffer an injury. The Unfair Competition Law can be used as the basis for a shipping insurance lawsuit if the defendant violated the “fraudulent” prong of the statute by misleading customers about the additional charge. In these cases, the plaintiff will need to establish two elements to bring a successful claim: (1) that the company deceived the public in some way either in an advertisement or during the checkout process; and (2) that the consumer relied upon the company’s statements or advertisement.
There are several ways that a company could violate the UCL by attempting to charge customers for shipping insurance:
When a company fails to disclose information that consumers need in order to make informed decisions about a purchase, it could be a violation of the UCL. Whether it’s a misleading advertisement or a concealed charge on a company’s website order form, California consumers may be able to bring a shipping insurance claim under the UCL.
CLRA Claims
This type of conduct by a business might also violate the California Consumers Legal Remedies Act (CLRA), which prohibits certain unlawful acts involving consumers. For example, the CLRA explicitly forbids companies from “advertising goods or services with intent not to sell them as advertised.”
The ordering and check-out processes on some e-commerce websites are confusing and possibly even deceptive. As a result, it’s very possible that consumers are unknowingly purchasing shipping insurance as an upcharge or add-on because websites don’t make the additional charge immediately apparent to site visitors. Moreover, it’s possible that some consumers would not have purchased the product at all if they had known about the shipping insurance charge. Worse yet, many consumers might not become aware of the additional charges until much later when their bank account or credit card is debited for the order.
Contact the Los Angeles False Advertising Lawyers at Tauler Smith LLP
Were you charged for shipping insurance while making a purchase on an e-commerce website? The Los Angeles false advertising lawyers at Tauler Smith LLP represent clients in civil lawsuits and class action lawsuits against companies that commit business fraud, including litigation involving shipping insurance claims against companies that illegally offer shipping insurance in online transactions. Call 310-590-3927 or email us to schedule a free initial consultation.
California’s Unfair Competition Law (UCL)
/in False Advertising /by taulersmithCalifornia’s Unfair Competition Law (UCL) is one of the most important consumer protection laws in the country. California courts tend to interpret the UCL broadly so that it applies to a wide range of unethical business practices. The statute explicitly prohibits companies from engaging in unlawful, unfair, or fraudulent business actions. It also prohibits companies from using false advertising. Businesses that violate the UCL may be subject to penalties that include financial compensation, monetary fines, and injunctions to stop committing certain acts. This means that consumers who purchase a product or service from a business that violates the UCL may be able to have an experienced California consumer fraud lawyer file a lawsuit and seek financial restitution.
To learn more about the California Unfair Competition Law, keep reading this blog.
What Is the California Unfair Competition Law?
The California Unfair Competition Law (UCL) is codified in Bus. & Prof. Code section 17200. The UCL protects consumers against business fraud, false advertising, and other deceptive practices by placing limits on companies doing business in California. The statute also protects honest companies and ensures that competition remains fair and strong, with no one company allowed to stifle competition and gain a competitive advantage by breaking the law.
Importantly, the UCL applies to all private companies doing business in California. This means that if a company is based in another state, if they sell to consumers located in the state, or even if they advertise in the state, they can be sued under the UCL.
What Is “Unfair Competition”?
The California Unfair Competition Law defines “unfair competition” as any of the following:
Courts have interpreted the UCL broadly so that just about any violation of the law by a business can also constitute a violation, so long as the action or practice injured consumers or gave the business an advantage over its competitors. One of the most common examples of unfair competition in consumer transactions is when a company makes misrepresentations to customers about the type, quality, or cost of a product or service.
Deceptive Advertising
Examples of deceptive advertising that may violate the UCL include robocalling customers, using bait and switch advertising to trick customers, using fake endorsements in ads, exaggerating product descriptions, omitting important information about a product or service in an advertisement, manipulating prices, using false reference pricing in ads, and infringing on another company’s intellectual property.
Unlawful, Unfair, and Fraudulent Business Acts
The UCL defines “unlawful” business acts or practices as any action taken by a company that violates state or federal law. Even if the company committed the unlawful act just once, that can be enough to trigger legal action under the UCL.
An “unfair” business act or practice, as defined by the UCL, is typically committed by either a company or a business competitor. Generally speaking, a company violates the UCL when they attempt to sell goods or services that harm consumers. In the context of a business competitor, it is considered an unfair business act when the company does something that broadly undermines competition in the marketplace.
The UCL also prohibits “fraudulent” business acts or practices, which means any conduct that misleads or deceives consumers. When a consumer relies on false statements made by the company in an advertisement or at the point of sale and subsequently suffers an economic injury, they may be able to bring a UCL claim for restitution.
Private Right of Action Under Section 17200 of the UCL
The California Unfair Competition Law (UCL) allows both private parties and public prosecutors to take legal action against companies that commit fraudulent business acts. In most cases, an individual who has suffered an injury because of unfair competition must have their lawsuit filed by a county or city prosecutor. When the lawsuit is filed as a class action, however, a consumer may bring the action as a private plaintiff.
Standing to sue under the UCL can be established by showing that the plaintiff sustained an economic injury because of the business’ conduct. If the plaintiff bought an item from the business, then this would be enough to meet the UCL standing requirement.
False advertising claims brought under the UCL must establish that the plaintiff sustained economic injury because the defendant company engaged in misleading advertising of goods or services. Basically, this means that the consumer needs to show that they purchased an item or service and that they did so because of a deceptive advertisement.
Strict Liability
Section 17200 of the Unfair Competition Law imposes strict liability on businesses that commit fraud, which means that it does not matter whether they intended to commit fraud. The mere fact that their actions were unlawful, unfair, or fraudulent is enough to violate the statute. Additionally, it is not a defense against a UCL claim that the company’s ad was true or accurate. That’s because the plaintiff in a UCL case merely needs to show that the ad was likely to mislead consumers.
Moreover, it is important for businesses to understand that they can be sued under the UCL even if their actions are not technically unlawful. That’s because the statute explicitly prohibits “unfair” business acts and practices.
Restitution and Damages Available in UCL Claims
There are two remedies available to plaintiffs in an Unfair Competition Law claim:
There are no punitive damages allowed in UCL cases. This is one reason that individual consumers often join forces to file a UCL claim as a class action, which can make it harder for the defendant to avoid paying a large damages award. A knowledgeable California UCL attorney can help the plaintiffs determine if it would be better to bring a class action lawsuit.
What Is the Statute of Limitations for UCL Claims?
The statute of limitations for a UCL claim is four (4) years, with the clock starting as soon as the business commits the fraudulent act or as soon as the plaintiff discovers the fraud. The standard used in these cases is a reasonable person standard, which means that the court will ask whether a person who exercised reasonable diligence would have discovered the unlawful business act when the statute of limitations period started to run.
Related Laws: CLRA, ARL, and FTC Act
There are a few other related statutes that California consumers should be aware of when deciding whether to file a UCL claim.
CLRA Claims
Unfair Competition Law claims are often accompanied by claims under the California Consumers Legal Remedies Act (CLRA). The CLRA is more limited than the UCL because the CLRA includes protections for specific actions by businesses, whereas the UCL applies broadly to business fraud. It may be in the best interests of a plaintiff to bring a claim under both statutes because the remedies are cumulative. Beyond that, only the CLRA allows for punitive damages to be imposed against the defendant. Additionally, the CLRA allows plaintiffs to recover attorney’s fees.
ARL Claims
It is also possible for California consumers to use the Unfair Competition Law to bring a private civil action against companies that violate California’s automatic renewal laws. This is significant because the California ARL does not allow for a private right of action, which means that consumers who are deceived into signing up for an auto-renewal subscription may still be able to sue for full restitution under the UCL.
Federal Laws
There are also federal laws, such as the Federal Trade Commission Act (FTC Act), that protect California consumers against business fraud and false advertising. One advantage for plaintiffs filing a UCL claim is that the state statute has broad consumer protections that go beyond the protections provided under federal law.
Keep in mind that defendants may argue that more lenient federal law should apply in a particular case instead of the stringent California state law. That’s why it is important to have a skilled Los Angeles false advertising attorney on your side throughout the case.
Contact the California Consumer Protection Attorneys at Tauler Smith LLP
Tauler Smith LLP is a Los Angeles law firm that represents consumers in civil litigation, including class actions based on UCL violations. Our Los Angeles consumer protection lawyers understand the nuances of the California Unfair Competition Law, and we can help you get financial restitution from a company that used fraudulent business practices. Call us today at 310-590-3927 or email us to discuss your case.
JAMS Private Judges Accused of Corruption
/in Arbitration /by taulersmithJAMS is a private arbitration firm based out of Irvine, California. John Trotter helped to start the company, and today he remains one of the principals and a profit-earning shareholder. Trotter and other JAMS private judges have been accused of corruption for allegedly helping attorneys commit fraud and steal millions of dollars from clients. The absence of government regulation of the private arbitration industry has made it possible for unethical lawyers to take advantage of their clients and for big companies to abuse the arbitration system.
For more information about the corruption allegations against the JAMS private judges, keep reading this blog.
No Government Regulation of JAMS Private Judges
JAMS typically uses retired judges to serve as arbitrators and mediators in legal disputes, including business conflicts, contract disputes, intellectual property claims, personal injury claims, and civil rights actions. The former judges who administer cases are known as “JAMS Neutrals,” which is ironic because they are often anything but neutral.
A major problem with the JAMS private arbitration system is that the cases are decided behind closed doors and with little or no scrutiny. For instance, private judges are not subject to regulation by any government agency. The State Bar of California highlighted the issue by declaring in a statement that there is “no overarching regulatory framework for private judging or mediation.” California Supreme Court Chief Justice Tani Cantil Sakauye recently noted that there needs to be greater government oversight of the private judging industry so that litigants are protected.
JAMS Founder John Trotter Accused of Helping Disgraced Lawyer Swindle Clients
John K. Trotter was a retired California Appellate Justice with an unimpeachable record. Trotter began his legal career as a plaintiffs’ attorney in Orange County, and then moved on to the L.A. Superior Court bench and later to the California Appellate Court bench. He eventually helped to start JAMS. At one point, the National Law Journal called Trotter “the most influential attorney” for Alternative Dispute Resolution (ADR) in the entire United States. Now, there are numerous questions being asked about Trotter’s role with JAMS, including whether he helped others use the private arbitration system to defraud participants.
John Trotter & Tom Girardi
John Trotter and JAMS have come under scrutiny in recent years for conflicts of interest in cases involving regular JAMS clients. In one extreme example, JAMS allegedly helped California attorney Tom Girardi steal millions from his clients. During his illustrious legal career, Girardi earned a reputation as a dogged defender of people who had been victimized by large corporations. In litigation involving aerospace company Lockheed Martin, he represented hundreds of workers who had contracted cancer and other illnesses on the job. After securing a massive settlement on behalf of his clients, Girardi enlisted multiple JAMS judges to fairly distribute the funds. The judges were tasked with determining exactly how much money each worker would get based on their specific injuries.
John Trotter served as the “special referee” who oversaw the distribution of settlement money to Girardi’s clients in another major case against a drug company that sold the diabetes medication Rezulin. The plaintiff alleged that the medication caused cancer, liver failure, and other maladies. After helping to secure a $66-million settlement, Girardi used JAMS mediator Trotter to oversee the distribution of funds. Instead of distributing the funds to the victims, however, Girardi diverted the money to his personal accounts. Moreover, while this fraud was happening, Trotter and JAMS did nothing to stop it.
In addition to having the final say on how funds were distributed in Girardi’s lawsuit settlements, Trotter also oversaw a $13-billion trust meant for the victims of Northern California wildfires. Any withdrawals from the settlement fund were supposed to reimburse the attorneys for legal costs related to the case, not for personal expenses. This is where it became apparent that Girardi’s relationship with JAMS judge Trotter was problematic. While Trotter approved millions of dollars in withdrawals for Girardi, he approved just $600,000 in withdrawals by another law firm that worked on the case. Moreover, this wasn’t the only time that a JAMS private judge has been accused of showing favoritism to one party over another.
JAMS Judge Jack Tenner Allegedly Signed False Documents to Defraud Litigants
One of the JAMS judges in the Lockheed Martin case was Jack Tenner, a respected jurist who spent a decade serving on the Los Angeles Superior Court bench. As an attorney, Tenner had fought against racial discrimination in the city. While serving as a mediator in the Lockheed litigation, Tenner allegedly helped Tom Girardi cheat clients by signing false documents on L.A. Superior Court letterhead. Those documents directed Comerica Bank to release millions of dollars to Girardi. Later, when Girardi came under fire from clients who questioned what he was doing with their money, Tenner explicitly supported the attorney. In a letter to the plaintiffs, Tenner said that he had personally approved all settlements and legal fees.
JAMS Judge Edward Panelli Accused of Corruption
Another JAMS judge accused of corruption is Edward A. Panelli, a retired California Supreme Court Justice. Panelli socialized with Tom Girardi even as he worked on JAMS cases for the dishonest lawyer. Panelli was chosen by Girardi to oversee the settlement distribution in a high-profile case involving a menopause drug called Prempro that allegedly caused cancer in elderly women. When many of the plaintiffs started asking questions about why they had yet to receive their portion of the $17 million settlement, Girardi said that he withheld the funds because of an order issued by Panelli. Girardi then refused to turn over financial records, as was required under California law.
Girardi’s claim that Panelli was forcing him to withhold funds from the cancer survivors turned out to be a lie. In fact, Panelli had no legal authority over the case because no court had ever appointed him to oversee the settlement. Moreover, Panelli had only spent around 20 hours working on the case. (For which JAMS billed the law firm $78,000, with another $50,000 payment being made directly to Panelli. This amounted to a $5,000 per hour pay rate.) To make matters worse, Panelli – even in his limited capacity – never instructed Girardi to hold back the money. A California magistrate judge later evaluated Panelli’s actions and concluded that the JAMS judge was culpable in the fraud because he had “rubber-stamped” all of the unlawful payouts to Girardi.
In the Prempro case, Girardi even tried to use Panelli to stop a lawsuit filed by the plaintiffs. When the clients sued Girardi, he argued that the case should be transferred from federal court to a private arbitration with Panelli making the final ruling. Not only did Girardi fight back against subpoenas and court orders, but so too did JAMS. After Girardi’s clients filed lawsuits to ensure transparency and so that they could finally get their settlement funds, JAMS spent months pushing back in court.
Other JAMS Judges, Arbitrators, and Mediators Allegedly Helped Tom Girardi Steal Settlement Funds
John Trotter, Jack Tenner, and Edward Panelli were not the only JAMS judges accused of helping Tom Girardi scam his clients. One former judge allegedly signed a fake court order that allowed Girardi to secure $3.5 million from a settlement fund meant for workers of Lockheed Martin who had been poisoned at the company’s Burbank facility. Another former state Supreme Court justice employed by JAMS allegedly assisted Girardi as he stole more than $1 million from cancer survivors.
Contact the California Arbitration Lawyers at Tauler Smith LLP
Tauler Smith LLP is a law firm with experience handling legal disputes that require mediation and arbitration in California, Texas, and New York. Our experienced arbitration lawyers also represent small business owners in class action lawsuits against JAMS. If your case is being administered by JAMS, it is very important that you contact one of our attorneys immediately. Call us or send an email.
How Tom Girardi Used JAMS to Defraud Clients
/in Arbitration /by taulersmithTom Girardi has been accused of using JAMS to defraud clients. Girardi was a highly respected California attorney who spent decades representing plaintiffs in class action lawsuits against corporations. JAMS, previously known as Judicial Arbitration and Mediation Services, is the largest private mediation and arbitration company in the world with more than 400 former judges and legal professionals serving as arbitrators and mediators in California, Texas, New York, and other states. JAMS has come under intense scrutiny from arbitration lawyers and others in the legal community as several of the company’s judges were accused of unethical conduct and corruption.
To learn more about the fraud allegations against Tom Girardi and the JAMS private judges, keep reading this blog.
Tom Girardi Used to Be a Respected California Attorney
Tom Girardi’s abuse of the private judging system lasted decades and affected thousands of clients. Earlier in his legal career, Girardi was one of the lawyers responsible for the case that later inspired the acclaimed movie Erin Brockovich. As an attorney for residents of Hinkley who got cancer from local drinking water, Girardi helped to secure a $333-million settlement.
Girardi’s law firm eventually collapsed as more and more evidence came to light that he had swindled his clients out of millions of dollars. In 2022, Girardi lost his license to practice law in California and his law firm filed for bankruptcy.
Tom Girardi Stole Money from Clients
When a corporation gets sued in a contract dispute, employment claim, consumer action, or some other type of legal dispute, they often rely on JAMS to make sure that the case is handled behind closed doors with an arbitrator or mediator instead of a judge. Additionally, it is not uncommon for retired judges with JAMS to be asked to administer large settlements in mass tort cases. In Girardi’s cases, the JAMS judges failed to notice and/or take action when Girardi stole millions from the parties. This is just one of several instances of JAMS private judges with a huge conflict of interest in the cases they oversee.
A forensic accountant who examined law firm finances determined that Girardi was using his clients’ settlements “like a slush fund.” An audit of Girardi’s financial accounts reportedly showed that he had stolen money from his clients and given it to companies and individuals who had no connection to any of his cases. Even when Girardi claimed that the money was spent on “expert witnesses,” the withdrawals were suspicious. For example, one withdrawal of $450,000 for an expert witness in a case against Lockheed Martin was “confidentially” approved by a JAMS judge.
Erika Jayne
At the time of his deceit involving JAMS, Tom Girardi was married to Erika Jayne, who is best known as one of the stars of the reality show “The Real Housewives of Beverly Hills.” According to one federal judge, Girardi committed multiple crimes when he used his clients’ settlement funds to cover personal expenses for himself and his wife. For example, Bankruptcy Court records indicated that Girardi gave $750,000 to M.M. Jewelers for the purchase of a pair of diamond earrings for his reality TV star wife. He did this shortly after gaining access to the settlement funds, and he reportedly classified the purchase as a case expense. A federal bankruptcy judge, Barry Russell, later said that Girardi’s use of client money to buy expensive jewelry “clearly was a crime” along the lines of theft or embezzlement.
At other times, Girardi took from his clients’ settlement funds to pay himself. Records showed that he would often write several million-dollar checks to his firm in the same week. In one case, Girardi withdrew more than $15 million. Girardi claimed that this money was for his “costs” of representing the plaintiffs, but the amounts and pattern of the withdrawals from the settlement suggested that it was fraud.
JAMS Private Judges Accused of Helping Tom Girardi Cheat Clients
Tom Girardi was able to get away with his deceit because he used private judges affiliated with JAMS. The JAMS private judges have wide latitude and wield substantial power in legal disputes precisely because there is basically zero government oversight of the private arbitration industry. California Supreme Court Chief Justice Tani Cantil-Sakauye reacted to the revelations about Girardi’s conduct by calling it “shocking.” Cantil-Sakauye commented further on JAMS by observing that there are currently not enough safeguards to ensure that private judges remain fair and impartial. For instance, the retired judges are not subject to supervision by the Commission on Judicial Performance (CJP), an independent California agency tasked with investigating complaints of judicial misconduct.
Many of the JAMS private judges had impeccable reputations prior to joining the arbitration company, which allowed Tom Girardi to establish credibility even as he misappropriated money from his clients. He later used the perceived reputations of the “JAMS Neutrals” to deflect questions about his misconduct. When Girardi’s clients began to suspect that something was amiss with their settlement funds, Girardi actually referenced the private judges’ impressive credentials to justify his unethical actions. According to a Los Angeles Times investigation of Girardi’s fraud, the JAMS arbitrators “occupy a secretive corner of the legal world.” The private arbitration industry is almost entirely unregulated, which exposes parties to significant risks.
JAMS Profited from Tom Girardi’s Lawsuits
Private arbitration is a lucrative industry, and there can be plenty of financial incentives for the JAMS judges, arbitrators, and mediators to rule a certain way. In the aftermath of the revelations about the massive scale of Tom Girardi’s fraud and theft, many questions have been raised about whether the legal system has enough safeguards to protect litigants against predatory attorneys and unethical arbitrators when the JAMS Alternative Dispute Resolution (ADR) service is used. That’s because there can be a conflict of interest for JAMS arbitrators and mediators. This was especially true in Girardi’s cases, which involved Girardi paying the JAMS private judges up to $1,500 an hour.
In one of Girardi’s biggest lawsuits, he represented patients who claimed that a large drug company’s diabetes medication, Rezulin, had caused serious health problems, including liver failure. That case resulted in a $66 million settlement on behalf of the plaintiffs, many of whom desperately needed the money to cover their medical expenses. Girardi convinced the victims to allow a JAMS mediator to oversee the settlement and to supposedly ensure that the funds were distributed in the right amounts and to the right individuals. For this service, JAMS received a $500,000 cut of the proceeds.
What Did JAMS Judges Do to Earn Their Fees?
JAMS also received a $500,000 fee for handling the Lockheed Martin settlement that Girardi secured, an enormous figure that was kept secret from clients. When a bankruptcy court requested a full accounting of exactly what John Trotter and the other JAMS judges had done to earn that fee, the arbitration company refused to provide invoices.
Girardi eventually filed for bankruptcy, which has made it even more difficult for those he had deceived and stolen from to get the money they were owed. Incredibly, one of the companies participating in the bankruptcy proceedings is JAMS, which requested a sum of nearly $10,000 for “an unpaid bill.”
Conflicts of Interest When JAMS Oversees Legal Disputes
In addition to the obvious conflict of interest that exists anytime a company pays a JAMS judge to arbitrate a dispute or oversee a settlement, there were other less obvious conflicts with Tom Girardi. For instance, Girardi reportedly arranged for several JAMS judges to go on a Mediterranean cruise after they ruled in his cases. Although Edward Panelli later claimed that his attendance at the event did not affect his “impartiality as a jurist or neutral,” his actions as a JAMS private judge suggested otherwise.
Carousel Lawsuit
In one high-profile case, Girardi represented 1,500 residents of Carousel, a housing development located just outside Los Angeles. The clients were suing an oil company and a real estate developer allegedly responsible for polluted soil that caused widespread cancer and other health issues. After reaching a settlement with the defendants, Girardi specifically requested that JAMS and John Trotter serve as special master to determine how the funds should be divided among the plaintiffs.
After more than two years, many of the clients still had not been paid. When one of the clients requested information about Girardi’s accounting practices, Girardi once again placed the blame on Trotter and JAMS. When that same client sued Girardi, the attorney insisted that the lawsuit be moved from a courtroom into private arbitration. As usual, Girardi wanted the arbitration handled by JAMS. The perception was likely that a JAMS private judge would show favoritism and rule in Girardi’s favor.
Contact the California Arbitration Lawyers at Tauler Smith LLP
Are you one of the parties in an arbitration being administered by JAMS? Is your case being overseen by a JAMS private judge? The California and Texas arbitration lawyers at Tauler Smith LLP can help you. Our legal team represents small business owners and individuals in arbitration, mediation, and other types of alternative dispute resolution. We also handle settlement negotiations. Call or email us to schedule a free consultation.
Tauler Smith Wins Federal Bench Trial for Insurance Consumer
/in Successes /by taulersmithThe insurance claim lawyers at Tauler Smith LLP recently won a major trial on behalf of a food & beverage manufacturer in a federal court in St. Louis, Missouri. The litigation began in a California courtroom with a business dispute over the manufacture of protein bars. Later, several of the parties in that case were also involved in insurance litigation heard by a U.S. District Court. Now, the judge has issued a ruling, with Tauler Smith winning a federal bench trial for their insurance consumer client.
The federal court’s decision can be read here. To learn more about Tauler Smith’s victory in the insurance claim lawsuit, keep reading this blog.
California Nutritional Supplement Lawyers Represent Food Manufacturer in Defective Protein Bar Lawsuit
One of the defendants in the nutritional supplement lawsuit was Eagle Mist Corporation, which does business as Osagai International and which is run by Kevin Laughlin. Eagle Mist is a company that invents and formulates functional foods, such as protein shakes and nutrition bars. They also provide other manufacturers with the technological ingredients they need for foods, beverages, and personal care products.
Nutritional Supplement Agreement
Eagle Mist entered into an agreement to supply ingredients to Sapphire Bakery, which would use the ingredients to reformulate and manufacture 13 types of nutritional protein bars. Sapphire then supplied the nutrition bars to Defense Nutrition, which finally supplied the bars to Julian Bakery.
Nutritional Supplement Dispute
Julian Bakery, the company that ultimately received delivery of the protein bars, alleged that the bars were defective due to the other companies modifying the formula of the bars, in addition to using certain processing agents during manufacturing. Julian Bakery sued Eagle Mist and Sapphire for breach of contract, damages related to defective goods, negligence, breach of warranty, unfair business practices, fraud, negligent misrepresentation, and promissory estoppel.
The lawsuit was filed in the Los Angeles County Superior Court, and the complex multi-party litigation included cross-complaints between seven (7) parties that all had a connection to the business dispute. Los Angeles nutritional supplement attorney Robert Tauler represented Eagle Mist in the California litigation, and successfully defeated three successive motions for summary adjudication in the case.
Insurance Coverage Dispute in California Food Supplement Case
Before starting production on the nutrition bars that were to eventually be delivered to Julian Bakery, Eagle Mist needed to get insurance coverage. At the time, Sapphire Bakery had a commercial general liability policy of insurance issued by Ohio Security Insurance Company. That policy called for Ohio Security to cover any legal expenses that Sapphire might one day become obligated to pay as damages in a lawsuit if sued. Since Sapphire’s insurance policy with Ohio Security allowed for the “named insured” to extend coverage to another company as an “additional insured,” Sapphire asked Ohio Security’s insurance broker to include Eagle Mist in its policy. The insurance broker then provided a certificate of liability insurance to Eagle Mist.
The insurance coverage became extremely important later when there was a business dispute over the manufacture of the nutrition bars. Sapphire Bakery’s insurance policy with Ohio Security meant that the insurance company would pay for Sapphire’s legal defense in the nutritional supplement litigation. The insurance company also agreed to pay for Eagle Mist’s legal defense in the civil suit because Eagle Mist was on the policy as an additional insured.
Texas Consumer Protection Attorney Camrie Ventry Wins Insurance Claim Litigation in U.S. District Court
The plaintiffs in the insurance claim litigation were Ohio Security Insurance Company and Ohio Casualty Insurance Company. The parent company of Ohio Security and Casualty is Liberty Mutual Insurance. Ohio Security and Liberty Mutual paid for Eagle Mist’s legal defense in the California nutritional supplement case. Later, the insurance companies argued at trial that Eagle Mist should be ordered to pay back their legal defense costs because they were never supposed to be covered under the insurance policy.
Dallas consumer protection attorney Camrie Ventry of Tauler Smith LLP represented Eagle Mist in the insurance coverage lawsuit. The case was heard by the United States District Court for the Eastern District of Missouri, with the court holding a one-day bench trial and issuing a memorandum opinion on December 16, 2022. The court was tasked with determining whether Ohio Security Insurance Company did, in fact, have a legal obligation to defend Eagle Mist under the terms of its insurance policy, as well as whether Ohio Security was entitled to reimbursement of the legal defense costs that they provided to Eagle Mist.
Federal Court Rules That Insurance Company Unreasonably Delayed Its Coverage Decision
Ohio Security’s argument at trial was that because Eagle Mist was never covered under the insurance policy, the insurance provider was entitled to recover all expenses it paid for Eagle Mist’s legal defense. The U.S. District Court rejected this argument and found that, under the circumstances, it was justified for Eagle Mist to retain the benefits of the legal expenses paid by the insurance company. Accordingly, the court entered judgment in favor of the Tauler Smith LLP client.
The court cited four main reasons for its ruling in favor of Eagle Mist and against the insurance company:
#1 – Insurance Company Agreed to Extend Policy Benefits
One of the benefits of Ohio Security’s insurance policy with Sapphire Bakery (and with Eagle Mist) was that Ohio Security agreed to pay all legal defense costs if there was a lawsuit brought by a third party.
As soon as the defective protein bars lawsuit was filed, Kevin Laughlin and Eagle Mist contacted Ohio Security Insurance Company to confirm that Eagle Mist was covered under the insurance policy. The U.S. District Court said that Eagle Mist had a good faith basis to believe that they were covered under the insurance policy. Kevin Laughlin communicated both verbally and in writing with Ohio Security to confirm that Eagle Mist was an additional insured under the policy, and he did the same with Sapphire Bakery. Moreover, the court found, Laughlin reasonably believed that the Certificate of Insurance issued by the insurance broker explicitly conferred coverage.
#2 – Insurance Company Knew the Policy Was Invalid
Shortly after the supplement civil suit was filed, the insurance company conducted its own investigation to verify whether Eagle Mist qualified as an additional insured under the insurance policy. During this investigation, Eagle Mist provided Ohio Security with email communications, purchase orders, and contracts.
According to the U.S. District Court, Ohio Security knew for several years that Eagle Mist was not actually covered under the insurance policy. But rather than acting quickly to provide notice, the insurance company delayed for three (3) years before finally informing Eagle Mist at a time when it would be most inconvenient for the food & beverage ingredient supplier.
#3 – Insurance Company Continued to Pay Legal Bills
After the investigation, Ohio Security still agreed to cover Eagle Mist’s legal fees for the nutritional supplement lawsuit. For the next three (3) years, the insurance company paid all of Eagle Mist’s legal bills in the case. During this time, Ohio Security made no statements to indicate that Eagle Mist was not covered under the insurance policy, nor did they provide notice to Eagle Mist that the food and beverage company was not covered under the insurance policy. It was only when the lawsuit was set to start trial that Ohio Security suddenly revealed that Eagle Mist never should have been covered under the policy. Ohio Security withdrew their defense, stopped paying Eagle Mist’s legal bills, and demanded that Eagle Mist repay nearly $1 million in defense costs already paid.
#4 – Insurance Company Delayed Its Coverage Decision
Although Ohio Security assumed the defense of Eagle Mist in the case and agreed to cover all legal costs, the insurance company argued that they had explicitly reserved the right to opt out of the arrangement. The court found this argument unpersuasive because the insurance company “essentially buried their head in the sand,” only to later “ask the Court to claw back funds they voluntarily paid over a span of years without producing any evidence that Defendants acted unjustly or that a three-year delay in asserting their coverage position was justified or reasonable.”
The insurance company knew at the start of the California nutritional supplement litigation that Eagle Mist was not supposed to be covered under the policy, but nevertheless continued to pay all legal costs while telling Eagle Mist that there were no issues. Then, after delaying for several years, the insurance company suddenly informed Eagle Mist that they were not covered under the policy. This sudden change in coverage came just one month before trial in the supplement lawsuit, when Eagle Mist would be most vulnerable.
The insurance company tried to justify its decision to withdraw coverage by pointing to a single, vague sentence about “reservation of rights” buried in a 25-page boilerplate letter. The court rejected this argument by noting that “a single mention in a twenty-five-plus-page boilerplate reservation of rights letter, without any further action by Plaintiffs for three years, was insufficient to put Defendants on notice they might not be covered under the Policy.”
Tauler Smith Insurance Litigation Team Represents Businesses & Consumers in California, Texas, and Throughout the U.S.
The Tauler Smith consumer protection & insurance litigation team is proud of its strong track record in insurance claim cases in state courts across California and Texas, as well as in federal courtrooms. Insurance companies must be held accountable when they attempt to take advantage of customers, which is why Camrie Ventry and our Texas litigators always fight so hard for clients in these cases.
After successfully defending Eagle Mist against Ohio Security and Liberty Mutual, Ms. Ventry called it “a great victory” for businesses and individuals who are unfairly forced to pursue the insurance benefits to which they are entitled. Ms. Ventry added, “This ruling shows that insurance companies cannot overreach by demanding to recover an exorbitant amount of money from the very people they are charged with protecting. The court got it right.”
Contact the California and Texas Insurance Claim Lawyers at Tauler Smith LLP
The attorneys at Tauler Smith LLP represent businesses and individuals in a range of practice areas, including dietary supplement lawsuits, consumer protection litigation, and insurance litigation. Call us today or send an email to schedule a free initial consultation about your case.
Retailers Settle Strikethrough Pricing Lawsuits
/in False Advertising /by taulersmithIn California and other states, several major retailers have settled strikethrough pricing lawsuits after being accused of violating false advertising laws. The lawsuits were filed in response to a common retail sales strategy: enticing customers to make purchases by highlighting comparison prices, which can include previous list prices that have since been reduced by the retailer or higher prices on similar items currently sold by competitors. This is especially prevalent among major retailers that advertise and sell products online. But comparison pricing is not without risks for the companies. That’s because there are both state and federal regulations of deceptive sale pricing. When a retailer violates these laws, it can lead to retail discount pricing litigation. Moreover, these lawsuits are often filed as class actions that involve many different consumers who were deceived into purchasing items because of deceptive pricing information.
To find out more about some of the major retailers that have been sued for strikethrough pricing violations, keep reading this blog.
Strikethrough Pricing in Retail Ads Can Violate California & Federal Consumer Protection Laws
Since price is often the deciding factor for consumers when the time comes to make a purchase, many retail companies use something known as compare-at pricing or strikethrough pricing. This is a sales and marketing strategy that emphasizes a product’s lower ticket price by comparing it to a higher list price or Manufacturer Suggested Retail Price (MSRP). Unfortunately, some retailers go too far with strikethrough pricing by offering deceptive discounts that mislead customers. Basically, the company mentions an inflated original price in an ad so that the “for sale” price appears greater by comparison.
What happens when a business misrepresents a sales price? For example, a company might offer a product at a perpetual sale price, meaning that it’s just a regular price that the company is lying about and passing off as a discounted price. Or a retail store might carelessly compare their price to another store’s price without acknowledging that the item offered at the other store is substantially different. It’s also possible that a business will use false reference pricing to compare their current price to a much higher price from many months or even years earlier. These kinds of fraudulent marketing and advertising practices may be unlawful violations of both California state and federal laws governing false advertising, consumer fraud, and unfair competition.
California Law
Under California’s comparison pricing law, retail companies that use reference prices when advertising or marketing their merchandise must follow strict guidelines. Most importantly, the original full price mentioned in the ad must be legitimate. If the item was never offered for sale at the higher price, or if it was only offered at that price for a short period of time, consumers may be able to file a lawsuit against the company for false advertising.
When a company cites a comparison price in an advertisement, they must be prepared to show that it was the prevailing market price within the three-month window preceding the publication of the ad. Absent that, the company must “clearly and conspicuously” indicate the date when the former price was in effect. Companies that fail to do either of these things may face consumer litigation in the form of a false advertising claim filed in California court.
Federal Law
The Federal Trade Commission (FTC) has a mission of enforcing federal consumer protection laws. To this end, the FTC has issued guidelines that strictly regulate former pricing. These promotional pricing guidelines stipulate that companies citing a former price in their ads or promotional materials must use an “actual, bona fide price” that was offered to the general public “on a regular basis for a reasonably substantial period of time.”
Major Retailers Named as Defendants in Comparison Pricing Lawsuits
Comparison pricing is a sales strategy used by retailers in a lot of different consumer categories:
Calvin Klein, The Children’s Place, Dressbarn, Eddie Bauer, JCPenney, Pier 1 Imports, Shutterfly, and Zales are just some of the major retailers that have been named as defendants in nationwide class action lawsuits alleging false reference pricing. Other major retailers have been ordered to pay large judgments in California comparison pricing cases. For instance, a court ordered Overstock.com to pay almost $7 million when state regulators filed suit against the internet retailer.
Amazon Settles California Deceptive Pricing Lawsuit for $2 Million
California district attorneys also filed a complaint against Amazon for using unlawful comparison prices when advertising products. The case was brought by district attorney’s offices in six California counties: Alameda, Riverside, San Diego, Santa Clara, Santa Cruz, and Yolo.
The complaint, which was filed in San Diego Superior Court, alleged that the reference prices mentioned by Amazon in their ads did not match the prevailing market prices for the items being sold. The Amazon ads distinguished former prices from current prices by stating “Was” or “List” next to the higher price. Many of the online ads also had strikethrough lines across the former price, making it clear to consumers that the newer “sale” prices were lower. But California prosecutors said that these comparison prices were misleading because there was no evidence to suggest that they were real prices.
Shortly after the legal complaint was filed, Amazon agreed to settle the deceptive advertising case for approximately $2 million. This included civil penalties and restitution to the consumers who purchased products because of the misleading price listings. The court also ordered Amazon to make significant changes to its pricing disclosures in online ads. (E.g., including hyperlinks on the website that clearly define key terms such as “Was” and “List” when used with prices.)
Contact the California False Advertising Lawyers at Tauler Smith LLP
Tauler Smith LLP is a California law firm that represents consumers in false advertising cases throughout the United States. Call 310-590-3927 or send an email to find out if you might have a legal claim against a retailer for using deceptive comparison prices in product advertisements.
California Deceptive Pricing Class Action Lawsuits
/in False Advertising /by taulersmithIt has become increasingly common for consumers to join California deceptive pricing class action lawsuits against retailers that market and sell products with deceptive pricing information. California’s false advertising law is often used as the basis for consumer class action litigation concerning false reference pricing because the state law is favorable to consumers. In recent years, there have been a number of class action suits filed in state court as consumers sued major retailers because of misleading pricing. Some of these cases settled, with the retail company agreeing to change their sales policies and paying out large settlement amounts to consumers. If you bought an item because of a comparison price in an advertisement, the Los Angeles consumer protection attorneys at Tauler Smith LLP can help you.
Keep reading this blog to learn more about California consumer class action lawsuits alleging deceptive pricing by retailers.
Reference Pricing Is a Tool Used by Retailers to Generate Sales
A comparison price, reference price, or strikethrough price might refer to the full price at which the retailer previously sold the product, the list price at which another seller currently offers the product, or the Manufacturer Suggested Retail Price (MSRP) of the product. Retail companies often rely on reference pricing as a marketing strategy to entice customers to make purchases by emphasizing that the ticket price represents a significant discount over full price. The idea is that the customer will see a sales price next to a higher regular price and be more likely to buy the item because it is on sale. This is commonly known as comparison pricing or strikethrough pricing (because the original price may have a line through it), and it can be an effective tool to increase sales revenues.
The general idea behind comparison pricing laws regulating these advertising strategies is that retailers should be transparent about the pricing of their products, including older prices that have been discounted for current sales. Common examples of unlawful comparison pricing include the following:
Jurisdiction in Deceptive Pricing Class Action Lawsuits
The jurisdiction matters a great deal when bringing consumer litigation. For example, California’s law is more plaintiff-friendly than other states, with California courts often finding in favor of plaintiffs who file legal claims alleging false reference pricing. There is also a reduced standard for establishing economic injury in California cases, since the plaintiff merely needs to show that the former pricing representations were misleading and that the false information is what prompted the purchase.
It is also possible for consumers to file a federal comparison pricing claim. Federal Trade Commission (FTC) guidelines prohibit retailers from deceptive sale pricing that uses inflated former prices as a point of comparison. For example, companies are not allowed to artificially inflate the price of a product for a short period of time just so that they can later reduce the price and then claim that the product is “on sale.” In false advertising and unfair competition cases, a federal court may look to the intent of the business to determine whether the initial price was set high solely for the purpose of later offering a large discount. Evidence of this unlawful intent could be that the retailer immediately reduced the inflated price and did not maintain it for a reasonable amount of time.
Winning Your California Comparison Pricing Class Action
False advertising claims involving deceptive pricing information are often filed as class action lawsuits in California. That’s because the plaintiffs are typically consumers who made a single purchase of a discounted retail item. The good news is that when you join other consumers in a comparison price class action, you are more likely to get the benefit of experienced legal counsel that can help you and all the other plaintiffs get reimbursed for the difference in value from your purchase, as well as statutory damages.
Certifying the Class
A knowledgeable California consumer fraud lawyer can make sure that you meet the requirements of a class action suit, which include establishing commonality among all plaintiffs through similar questions of fact and law. For example, your attorney may be able to get the class of plaintiffs certified by showing that all class members were victimized by the retailer’s sales price misrepresentations and that the same deceptive advertisement with false former prices was used in all instances.
In a California comparison pricing class action, it might also be easier for additional members of the class to gain standing to sue. That’s because at least one California appellate court held, in Branca v. Nordstrom, Inc., that the class members in retail pricing cases do not necessarily need to have purchased the same retail items as the named plaintiff. Rather, all that is needed for the additional individuals to join the class action suit is proof that they purchased items advertised with a comparison price.
The Discovery Process
One major advantage to filing a class action consumer lawsuit in retail discount pricing litigation is that the defendant will be subject to discovery during the class certification process, and discovery could produce significant evidence of wrongdoing. In order to certify the class, the plaintiffs’ attorney must show that there are common questions of law or fact among the plaintiffs and that those common questions predominate over any individual issues in the case. Since the discovery process allows the plaintiffs’ attorney to request documents from the defendant, this is an opportunity to potentially press the retailer for emails, price reports, and other internal documents that the retailer might not want exposed.
Depending on the type of information that is turned over during discovery, the plaintiffs may have strong evidence that the retailer violated consumer protection laws and intentionally misled consumers with deceptive comparison prices.
Damages & Financial Compensation Available in California Strikethrough Pricing Cases
The damages that might be available to plaintiffs in California strikethrough price cases include both compensatory damages and statutory damages. This gives consumers a lot of leverage against a retail company that violates state or federal promotional pricing guidelines by using fraudulent advertising practices. Moreover, when the retailer engaged in willful violations of the law, they may be subject to treble damages that can triple the compensatory damages available in the case.
Contact the California Consumer Class Action Lawyers at Tauler Smith LLP
Tauler Smith is a Los Angeles law firm that represents plaintiffs in consumer class action litigation in California and across the U.S. If you bought a retail item because the retailer used deceptive advertising, you should contact our legal team today.
Call 310-590-3927 or email us to discuss your eligibility to join a consumer class action lawsuit.
Federal Law on False Reference Pricing
/in False Advertising /by taulersmithA lot of major retailers have an online presence these days with company websites and advertisements on social media platforms like Facebook, Twitter, and Instagram. The explosion in online sales has also led to competition between traditional retailers and e-commerce businesses that are all fighting for the same internet-savvy customers. Sometimes, those companies become too aggressive and employ fraudulent marketing practices, such as using deceptive pricing information in ads. This type of advertising violates the federal law on false reference pricing. If you purchased a product because of a comparison price in an advertisement, the experienced consumer protection lawyers at Tauler Smith LLP can help you file a lawsuit against the retailer and get financial compensation.
For more information about federal laws on deceptive pricing by retailers, keep reading.
Why Do Retail Companies Use Comparison Pricing in Advertisements?
It’s a simple fact that retail businesses often rely on sales to get customers to make purchases. That’s because sales and discounts on an item’s full price can be attention-grabbers in promotional materials and advertisements, particularly when the customer believes that they are getting a once-in-a-lifetime bargain or deal. One of the strategies that retailers utilize in their sales ads is to include strikethrough pricing or comparison pricing. This is when the business provides two prices that the customer can compare to each other: a former list price or MSRP and a reduced current price. The original price usually has a line through the text to differentiate it from the new lower price, and the price with the line through it is known as the strikethrough price.
Sometimes, consumers feel pressured to buy an item because they are worried that the sale won’t last. But when the discount wasn’t real to begin with because the “full price” was inflated, the consumer ends up being tricked into making a purchase. A retail company that violates comparison pricing laws by using deceptive advertising is subject to government investigations, retail discount pricing litigation, and significant monetary penalties. They may also be named as the defendant in a consumer class action lawsuit, where consumers could be eligible for both statutory damages and actual monetary damages. In fact, a number of consumer class action lawsuits alleging deceptive sale pricing have been filed against major retail companies in California and other states. Some of these cases concluded with judgments in favor of the plaintiffs, while others concluded with pre-trial settlements totaling tens of millions of dollars.
FTC Guides Against Deceptive Pricing
The federal government has laws against unfair competition, false advertising, and false reference pricing. The Federal Trade Commission (FTC) specifically regulates sales advertisements for retail companies involved in interstate commerce, which applies to most businesses that sell products online. The reason behind the law is that companies have been caught using misleading prices to deceive customers. For example, a retailer might frame their current price as a “sale price” even though it is the same as a regular price. This can be done by including a “compare at” or reference price in the advertisement.
The FTC gets its authority to investigate allegations of consumer fraud from the Federal Trade Commission Act, which includes the FTC Guides Against Deceptive Pricing. These promotional pricing guidelines set limits on when companies can use former price comparisons in advertisements. Generally speaking, any former price mentioned in an advertisement or promotion must have been offered honestly and in good faith. Other, more specific requirements of the FTC guidelines include the following:
Federal Law vs. California Law on False Reference Pricing
California’s law on false reference pricing is broader in scope than the federal law, which is why Los Angeles consumer protection lawyers often file these lawsuits in state court rather than U.S. district court. For instance, the federal guidelines are less clear than the California false advertising law when it comes to specifying timeframes for establishing the prevailing market price. The FTC guidelines state that companies must maintain a price for a reasonable length of time before reducing it; otherwise, the initial price may be considered a false reference price. Similarly, how long ago can the company go back to reference a former price? What is considered “reasonable” under these circumstances? Federal law is unclear on this, but the California comparison pricing law is explicit: any prices used during the previous 90 days may be allowed.
Although the federal law on comparison pricing isn’t as robust as the California law, it still imposes significant requirements on businesses that make former pricing representations in their advertising.
Winning Your Federal Comparison Pricing Lawsuit
When deciding whether you should take legal action against a company that engaged in sales price misrepresentation, you need to speak with an experienced consumer fraud attorney who understands the nuances of federal consumer protection laws. Depending on the facts of your case, it may be possible for the retailer to argue in court that you did not suffer any economic harm when you made the purchase because you ended up with a product that you wanted at the price that you expected to pay. The retailer’s argument would be that regardless of their false comparison pricing claims in the ad, you should not be entitled to financial compensation or damages.
A knowledgeable consumer protection attorney can help you prove the required elements of your claim, which includes showing that you relied on the false reference pricing and made the purchase because of the retailer’s misleading statements.
Contact the California False Advertising Attorneys at Tauler Smith LLP
The California false advertising attorneys at Tauler Smith LLP represent plaintiffs in consumer litigation throughout the United States. If you purchased a product online or in a retail store because of a comparison price mentioned in an advertisement, you may be able to file a lawsuit and get financial compensation.
Call or email us today to schedule a free consultation.